Kuala lumpur: The ringgit opened slightly higher against the US dollar on Monday, supported by Malaysia's stable sovereign credit outlook and stronger domestic economic data. At 8.02 am, the local note was quoted at 4.2000/2200 versus the greenback, compared with Friday's close of 4.2040/2115.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid indicated that S and P Global Ratings' recent affirmation demonstrated that the government's sovereign rating remains stable. He noted that Malaysia's fiscal consolidation exercise has positively impacted its creditworthiness, with the fiscal deficit narrowing to 4.2 percent of GDP in the first half of 2025 from 5.5 percent in the same period last year. The government debt level at 62 percent of GDP remains below the statutory limit of 65 percent.
On September 20, the Ministry of Finance stated that S and P had reaffirmed Malaysia's sovereign credit ratings at 'A-' with a stable outlook, reflecting confidence in the country's macroeconomic management despite global trade uncertainty. The rating was backed by Malaysia's well-diversified economy, political stability, steady growth momentum, balanced external position, and narrowing fiscal deficits.
Meanwhile, Mohd Afzanizam mentioned that the US Dollar Index (DXY) had rebounded following the US Federal Reserve's interest rate cut last week. The DXY is hovering around 97 points and may continue to do so as traders and investors await more signals this week. A series of Fed officials are due to speak at public forums, and data such as personal consumption expenditures (PCE) inflation will be closely monitored.
SPI Asset Management managing director Stephen Innes remarked that expectations of two more US rate cuts this year should limit the ringgit's downside in the near term. He noted a positive phone conversation between China's President Xi Jinping and US President Donald Trump on Friday, which may pave the way for an in-person meeting at the 2025 APEC Economic Leaders' Meeting in South Korea next month.
At the opening, the ringgit also showed gains against a basket of major currencies. It rose versus the Japanese yen to 2.8348/8485 from 2.8419/8471 at Friday's close, firmed to 5.6540/6810 against the British pound from 5.6775/6876, and strengthened to 4.9279/9513 versus the euro from 4.9447/9536.
The local note was firmer against ASEAN currencies as well, advancing to 3.2670/2830 versus the Singapore dollar from 3.2744/2805, appreciating to 13.1707/2405 against the Thai baht from 13.1973/2271, edging up to 252.9/254.3 versus the Indonesian rupiah from 253.2/253.8, and strengthening to 7.35/7.39 against the Philippine peso from 7.36/7.38.